Gruma Rises After Posting Profitability Gain: Mexico City Mover

Gruma SAB (GRUMAB), the world’s biggest
tortilla maker, rose the most in a month after reporting an
increase in a measure of profitability during the second quarter
as sales fell.

The shares surged 3.4 percent to 63.48 pesos at the close
of trading in Mexico City, the biggest jump since June 21.
Mexico’s benchmark IPC fell 0.2 percent.

Adjusted net income in the three months through June fell
by 48 percent from a year earlier to 225.6 million pesos ($17.9
million), while sales fell by 17 percent, according to data
compiled by Bloomberg after the San Pedro Garza Garcia, Mexico-based Gruma reported the quarterly results yesterday. The
company’s margin of earnings before interest, taxes,
depreciation and amortization over revenue expanded by 3.7
percentage points to 11.8 percent, more than Mexico City-based
brokerage firm Corporativo GMB SAB’s estimated.

“Their current profitability margins are sustainable, and
we believe they will benefit from the tortilla boom,
specifically in the U.S.,” Miguel Mayorga, an analyst at GBM,
said in an interview. “The Spanish population will continue to
increase and influence Anglo consumption trends.”